WASHINGTON, D.C. - U.S. Senators Martin Heinrich (D-N.M.), Jeff Merkley (D-Ore.), and Catherine Cortez Masto (D-Nev.) announced the introduction of S. 3449, the Electric Cars Act of 2018, legislation to extend the electric vehicle tax credit for 10 years.
"At a time when electric cars are making advances in scale of production and becoming more competitive in the marketplace, we need to continue encouraging the progress we've seen--not take our foot off the pedal," said Heinrich. "This bill is pro-growth tax policy that will keep us moving our transportation sector forward. We need to remember that making our cars cleaner, and modernizing our energy use overall, isn't just about creating new jobs, or harnessing our innovative clean energy potential. It is about meeting our moral imperative to reduce carbon pollution and mitigate the devastating and costly consequences of climate change."
The Electric Vehicle (EV) tax credit has been instrumental in helping American electric vehicle manufacturers such as Tesla and General Motors advance the EV market, and offers more options to consumers. Given global efforts to transition away from internal combustion engines, the U.S. should not be limiting the production and support of domestically manufactured electric vehicles. A recent survey found that 74 percent of consumers say the tax credit would affect their decision to buy an EV, and 63 percent said the credit is an important measure to support EV adoption.
Currently, a federal tax credit of up to $7,500 is available for the purchase of electric vehicles. However, federal statute caps the number of vehicles eligible for the tax credit at 200,000 for each manufacturer. With domestic manufactures expected to hit this cap as early as this year, federal action is needed to ensure a competitive electric vehicle market that continues to provide the choice and ability for consumers to purchase electric vehicles.
The transportation sector is now the largest source of greenhouse gas emissions in the United States, and a significant source of carbon pollution worldwide. Countries across the globe have recognized this challenge and are aggressively investing in electric vehicle technologies in order to bolster fuel security, reduce pollution, and improve health outcomes. Nearly a dozen countries and dozens of cities have committed to phasing out internal combustion engines. The U.S., however, is at risk of falling behind on technology development and deployment of electric vehicles.
The Electric Cars Act has been introduced in the U.S. House of Representatives by U.S. Representatives Peter Walsh (D-Vt.) and Jackie Rosen (D-Nev.). In addition to Heinrich, Merkley, and Cortez Masto, the legislation is cosponsored in the Senate by U.S. Senators Kamala Harris (D-Calif.), Tina Smith (D-Minn.), Dianne Feinstein (D- Calif.), and Cory Booker (D-N.J.).
The Electric Cars Act would improve this vital tax credit by:
- Eliminating the per manufacturer cap, allowing consumers access to the tax credit for the next 10 years, regardless of the manufacturer from which they purchase their car.
- Allowing buyers to use the tax credit over a 5-year period, or apply the credit at the point of sale, making the credit more applicable to those without large tax liability
- Providing a 10-year extension of tax credits for alternative fuel vehicles and charging infrastructure to incentivize the buildout of this important infrastructure around the country.
A copy of the bill is available here.